Defining the difference between supply chain management and logistics can certainly be confusing. When talking in layman's terms, they seem very similar. Most think of supply as being logistics and logistics being supply. While the first viewpoint -- supply is an element of logistics -- is true, logistics encompasses more than just supply chain management. Think of logistics as an umbrella that covers several areas of sustainment, rather than just a supply element or supply chain management.
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Supply Chain Management
Defined, supply chain management is the process of providing oversight for a specific item or set of items whose quantity must be sustained to support an ongoing business or operation. A simple example of this is cheeseburgers. A burger joint must keep beef patties in stock to maintain its status as a favourite place to get a burger. When it runs out of burgers, it loses customers. A supply chain is used to maintain the flow of burgers to the physical restaurant.
The burger chain would look something like this: farm to meat processor; meat processor to the factory where the burgers are shaped; factory to central distribution centre; central distribution centre to regional distribution centre; and regional centre to restaurant.
Logistics includes not only the supply chain, but the means and modes of transportation, money and inventory used to keep the flow of product moving from start to finish. Logistics requires many managers who work different facets along the supply chain to keep it functional. Getting back to the burger example, the logistics aspect includes: the trucks, trains, planes and delivery vehicles used; fuel for these modes of transportation; maintenance of the company fleet; and various contract agreements.
In comparison, supply chain management ends up including elements of logistics and therefore can be referred to as the same. To say the "logistics of a burger joint are broken" would be the same as saying the supply chain is broken. This is because of the more broad definition of logistics, which includes all elements of supply.
The primary difference in supply chain management versus logistics is found in areas of management. A logistics manager looks at the large picture, while a supply chain manager focuses on a specific element of supply that impacts the flow of burgers. As a logistics manager, you would consider how transportation, contracts and efficiency affect the flow of burger patties, versus a supply manager, who would focus on the number of patties required each day to keep the burger joint as a consumer favourite. Ultimately, logistics could be working just fine while a supply chain remains broken. In contrast, a supply chain being broken would be the result of poor logistics.
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